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Gold & Silver Daily

Ed's Critical Reads

Apr 24, 2014

Weapon of Last Resort: ECB Considers Possible Deflation Measures

One of European Central Bank President Mario Draghi's most important duties is watching his mouth. One ill-considered utterance is enough to sow panic on the financial markets.

But during a press conference earlier this month, Draghi allowed himself a telling slip.

Speaking to gathered journalists at the Spring Meetings of the International Monetary Fund and the World Bank, Draghi twice almost uttered a word he has been at pains to avoid. "Defla…", Draghi began, before stopping himself and continuing with the term "low inflation."

Yet despite Draghi's efforts, the specter of deflation was omnipresent in Washington during the meetings. And it is one that is making central bank heads and government officials nervous across the globe. The IMF in particular is alarmed, with Fund economists warning that there is currently up to a 20 percent risk of a euro zone-wide deflation. IMF head Christine Lagarde has called on European central bankers to "further loosen monetary policy" to address the danger.

This longish article is worth reading---and it showed up on the German website very early yesterday evening Europe time---and it's the first offering of the day from Roy Stephens.

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Europe braces for gas showdown with Russia, helped by Japan's nuclear restart

The Western powers are scrambling to bolster defences against a halt in Russian gas supplies after the Kremlin tightened the energy noose on Ukraine, and paramilitary actions in eastern Ukraine increased the risk of a full-blown sanctions war.

The Geneva deal reached last week to defuse the crisis is close to disintegration, with the U.S. government openly accusing Russia of carrying out covert operations across the Donbass region.

Two key U.S. senators have already called for sanctions on large Russian banks, mining companies and energy groups, including the state gas monopoly Gazprom. Any such move would freeze gas deliveries to the E.U., since few European banks would risk defying U.S. regulators by handling Gazprom transactions.

Dmitry Medvedev, Russia’s premier, accused the Americans of “pure bluff”, challenging the U.S. to show its teeth. “You can, of course, continue to expand the 'black list’: it will lead absolutely nowhere,” he told the Duma.

This commentary by Ambrose Evans-Pritchard is definitely worth reading---and it was posted on the Internet site late on Tuesday evening BST.  It's the second offering in a row from Roy Stephens.

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Putin Has Taken Control of Russian Facebook

Russian president Vladimir Putin has essentially taken control of VKontakte, the home-grown Russian social network which is that country's version of Facebook.

The founder and CEO, 29-year-old Pavel Durov, posted on his VK page that he had finally given up control of the company to two investors allied with Putin, Buzzfeed reported:

Announcing his firing on his VKontakte page, Durov said: “Today, VKontakte goes under the complete control of Igor Sechin and Alisher Usmanov.” Usmanov is a metals tycoon who expanded into tech via his company, which has steadily upped its stake in the Russian social network. Until recently, Usmanov owned a 10% stake in Facebook. Sechin is the leader of the hardline silovik faction that backs Putin, is CEO of Rosneft, the state-owned oil company, and is believed to be one of the Russian president’s closest advisors.

Generally, Putin has maintained his control of Russia by allowing his allies to control vast chunks of the economy, like Rosneft. This appears to be an extension of that control into social media.

This very interesting news item was posted on the Internet site at noon EDT on Tuesday---and I thank West Virginia reader Elliot Simon for pointing it out.

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Putin's Dilemma: Fending off the United States' Imperial Hand

The United States is in the opening phase of a war on Russia. Policymakers in Washington have shifted their attention from the Middle East to Eurasia where they hope to achieve the most ambitious part of the imperial project; to establish forward-operating bases along Russia’s western flank, to stop further economic integration between Asia and Europe, and to begin the long-sought goal of dismembering the Russian Federation. These are the objectives of the current policy. The US intends to spread its military bases across Central Asia, seize vital resources and pipeline corridors, and encircle China in order to control its future growth. The dust-up in Ukraine indicates that the starting bell has already been rung and the operation is fully-underway. As we know from past experience, Washington will pursue its strategy relentlessly while shrugging off public opinion, international law or the condemnation of adversaries and allies alike. The world’s only superpower does not have to listen to anyone. It is a law unto itself.

The pattern, of course, is unmistakable. It begins with sanctimonious finger-wagging, economic sanctions and incendiary rhetoric, and quickly escalates into stealth bombings, drone attacks, massive destruction of civilian infrastructure, millions of fleeing refugees, decimated towns and cities, death squads, wholesale human carnage, vast environmental devastation, and the steady slide into failed state anarchy; all of which is accompanied by the stale repetition of state propaganda spewed from every corporate bullhorn in the western media.

Isn’t that how things played out in Afghanistan, Iraq, Libya and Syria?

This  commentary by Mike Whitney falls into the absolute must read category---and is by far the most important story in today's column.  It was posted on the Internet site yesterday---and it's another contribution to today's column from Roy Stephens, for which I thank him.

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Three King World News Blogs

1. Art Cashin: "Fed's Plan to Use Stocks to Boost U.S. Economy Has Failed"  2. James Turk: "Western Central Banks To Run Out Of Gold This Year"  3. Grant Williams: "West Hemorrhaging Gold But Here's Its True Achilles' Heel"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Goldman Sachs Stands Firm as Banks Exit Commodity Trading

Goldman Sachs Group Inc., whose three top executives began their careers at the firm in the commodity-trading unit, is poised to gain market share as pressure from regulators drives competitors to scale back.

Barclays Plc, the U.K.’s second-largest bank, said that it’s exiting commodities businesses other than trading precious metals and derivatives tied to oil, U.S. gas and commodity indexes. In January, the London-based bank cut jobs in the group that traded raw materials and in February shut power-trading desks in the U.S. and Europe.

JPMorgan Chase & Co. last month announced the $3.5 billion sale of its raw-materials trading unit to Mercuria Energy Group Ltd. and Morgan Stanley plans to sell its physical oil business to Russia’s OAO Rosneft. Goldman Sachs, Morgan Stanley, Barclays and JPMorgan were the biggest traders of commodity derivatives among banks, according to a Greenwich Associates survey last year.

“The more banks that exit commodities trading, the less competitive it becomes for the banks which stick with it,” Jeffery Harte, an analyst at Sandler O’Neill & Partners LP, said in a phone interview. Goldman Sachs has “the bigger franchise to be a winner. It now has a much bigger piece of a much smaller pie.”

This Bloomberg story showed up on their website late on Tuesday afternoon Denver time---and it's the second offering of the day from Elliot Simon.

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So central bank gold is being held in investment bank vaults

Yesterday's Reuters report about changes at the gold and currency trading desks of investment banks is notable for more than its acknowledgment that central banks are surreptitiously trading gold every day, an acknowledgement made last September by the Banque de France.

For in reporting that "banks that serve central banking customers with large bullion reserves to manage will have a greater need to offer gold trading and storage services," Reuters also has acknowledged that much central bank gold is now held outside central bank vaults.

That's what the reference to "storage services" is about.

Presumably the central bank gold being vaulted by investment banks is gold that central banks have leased or swapped into the market for market-rigging purposes.

This commentary by Chris Powell, with two embedded must read links, was posted on the Internet site yesterday.

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The Secret World of Gold

This 42:34 minute video has been around the block, as it has been viewed over 179,000 time on the Internet site, but I don't ever remember seeing it before, or even posting it in this column, although I'm sure I did.  However, based on the viewings, you've probably already seen it.

[I just watched it from start to finish right now---and I don't remember seeing it before---however I do remember posting it.]

But just in case you were on some other planet when it was made public, like I obviously was---here it is again---and I thank Casey Research's own John Grandits for bringing it to my attention on Monday.  And if you haven't seen it yet---it's certainly a must to view.

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Chorus to lower gold curbs grows louder in India

India's Commerce Ministry came out in favour of axing restrictions on gold imports.

"The present gold import policy is workable only for a short distance. When this policy was conceptualised, it was for a limited objective...the Department of Commerce has taken a very clear decision that this policy is not sustainable in the long run," Commerce Secretary Rajeev Kher told media persons.

He further said that the policy needed to be appropriately amended. In order to check India's rising current account deficit (CAD), the government had raised import duties on bullion, while the Reserve Bank of India had imposed additional curbs on the import of the metal to jewellery exporters.

Almost in tandem, as the Commerce Ministry pitched for the removal of restrictions on gold imports, came the news that India's gems and jewellery exports fell by about 9% to $39.5 billion in 2013-14.

This gold-related news item, filed from Mumbai, was posted on the Internet site yesterday.

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Apr 23, 2014

Social Security, Treasury target taxpayers for their parents’ decades-old debts

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

Wow!  You couldn't make this stuff up!  This news item showed up on The Washington Post's website almost two weeks ago---and Roy Stephens dug it up for us.  It's certainly worth skimming.


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Retail Store Closures Soar In 2014: At Highest Pace Since Lehman Collapse

What a better way to celebrate the rigged markets that are telegraphing a "durable" recovery, than with a Credit Suisse report showing, beyond a reasonable doubt, that when it comes to traditional bricks and mortar retailers, who have now closed more stores, or over 2,400 units, so far in 2014 and well double the total amount of storefront closures in 2013, this year has been the worst year for conventional discretionary spending since the start of the great financial crisis!

While distressed retailers (e.g. Radio Shack) and bankruptcies, which have reached a three-year peak year-to-date, make up 63% of the unit closures in 2014, they comprise only 34% of the total square footage closed. On a square footage basis, broadline retailers  contributed over 28% of closures, with M, DDS, JCP, TGT, and Sam's Club participating in right-sizing their store bases.

Office supply stores have been equally significant contributors to the rationalization process as they grapple with the effects of broader distribution and deeper online penetration. We expect this trend to continue as Office Depot evaluates its real estate in the wake of its merger with OfficeMax. Even dollar stores and drug stores, which combined have consistently built out hundreds of stores per year, are beginning to reel back on expansion, with Family Dollar and Walgreens both planning to shutter  underperforming stores.

This Zero Hedge piece from Monday, was something I found in yesterday's edition of the King Report.

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Existing Home Sales Hit 1-1/2 Year Low in March

U.S. home resales fell to their lowest level in more than 1-1/2 years in March, but there were signs a recent downward trend that has plagued the housing market may be drawing to an end.

"The negative housing momentum, which was exacerbated by severe weather conditions during the winter months, may be starting to fade," said Gennadiy Goldberg, an economist at TD Securities in New York.

Existing home sales are counted at the closing of contracts and March's sales reflected contracts signed in January and February, when the country was in the grip of an unusually cold and snowy winter.

[But] even accounting for the terrible weather, the housing market has slowed significantly since last summer as a run-up in mortgage rates, high house prices and a dearth of properties sidelined potential buyers.

This very interesting news item appeared on the Internet site yesterday morning EDT---and it's the first offering of the day from West Virginia reader Elliot Simon. It's worth reading as well.

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Hussman: The Fed Has Built a 2-Legged Stool

The Federal Reserve is resting the fate of the U.S. economy on a two-legged stool by focusing only on jobs and inflation, while financial excesses are left unchecked, according to Fed perma-critic and mutual fund manager John Hussman.

In his weekly market commentary, the founder of the eponymous Hussman Funds predicted the Fed has baked unavoidable consequences into the cake of massive monetary stimulus that will prevent its employment and inflation goals from being met.

"Make no mistake. The Federal Reserve's policy of quantitative easing has starved investors of all sources of safe return, provoking them to reach for yield in more speculative assets, including equities, leveraged loans, covenant-lite debt and other securities," he wrote.

"Having stomped on the pedal for years, all of these asset classes are valued at levels that are strenuously elevated from a historical perspective, and as a result, offer strikingly poor prospective returns for long-term investors."

It sounds like John has been reading Doug Noland's weekly Credit Bubble Bulletin on a regular basis, as his  weekly market commentary [which is linked in the story itself] is spot on.

This is another article from the Internet site---and it's also courtesy of Elliot Simon.  It falls into the must read category.

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IRS workers who didn't pay taxes got bonuses

The Internal Revenue Service handed out $2.8 million in bonuses to employees with disciplinary issues — including more than $1 million to employees who didn't pay their federal taxes, a watchdog report says.

The report by the Treasury Inspector General for Tax Administration said 1,146 IRS employees received bonuses within a year of substantiated federal tax compliance problems.

Non-payment of taxes by federal employees is a government-wide problem. The IRS says 311,536 federal employees were tax delinquents in 2011, owing a total of $3.5 billion.

I came close to deleting this news item after reading the first few paragraphs, but I'm glad I read the whole thing, as it's definitely worth your while.  This short story was posted on the Internet site early yesterday evening EDT---and I thank Harry Grant for sliding it into my in-box in the wee hours of this morning.

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What Germany Left Behind: A Feeling of Abandonment in North Afghanistan

For 10 years, Germany was responsible for the province of Kunduz as part of its role in the International Security Assistance Force (ISAF). It was the first real war the Bundeswehr, as Germany's military is known, participated in, and Berlin's aims were lofty indeed. German development experts were to help extend rights to women, democracy was to be fostered and the economy was to grow significantly. Billions of euros were made available -- and the blood of German soldiers was spilled. Kunduz was a place of great sacrifice.

Until Oct. 6, 2013. On that day, Germany handed over the camp to Afghanistan.

"They ran away," croaks the deputy police chief for the Kunduz province in his office and gestures dismissively. "They simply ran away. It was too soon."

"It was too soon. It was like an escape." One can hear almost exactly the same thing from the mouths of German soldiers, some of whom even compare the Bundeswehr's departure with that of the Americans from Saigon at the end of the Vietnam War. "If there is one thing the Bundeswehr is really good at, it's retreating," is a sentiment that can often be heard in the government quarter in Berlin these days.

This very interesting, but not surprising, 2-page essay appeared on the German website late yesterday afternoon Europe time---and it's courtesy of Roy Stephens, for which I thank him.  And if you have the time, it's worth reading.

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Japan warns Beijing over ship seizure

China’s seizure over the weekend of a container ship owned by shipping giant Mitsui O.S.K Lines for its failure to respond to a wartime compensation order related to a contractual dispute has raised concerns in Japan that further assets may be confiscated if more rulings favor Chinese plaintiffs.

The container vessel was seized Saturday at a port in Zhejiang province, Shanghai municipal authorities said Sunday.

The seizure appears to mark the first time that an asset belonging a Japanese company has been seized over litigation related to wartime compensation.

The Maritime Court said that if Mitsui does not honor its legal obligations, it will dispose of the ship in accordance with the law.

This article showed up on the Internet site on Monday---and it's worth reading as well.  It has also had a headline change in the hours between the time I posted it---and finally got around to checking the link.  It now reads "China ship seizure hikes redress fears".  My thanks go out to Roy Stephens once again.

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BOJ Survey: Japan Q1 Bank Loan Demand Down; 1st in 3 Qtrs

Japan's corporate demand for financing via bank loans fell in January-March for the first time in three quarters on the back of lower capital investment and improvement of other funding tools, according to a survey of senior loan officers by the Bank of Japan, released Monday.

The BOJ's index for corporate fund demand, which is calculated by subtracting the number of banks reporting a decline in lending from the number of those reporting an increase, fell to +5 in the first quarter of 2014 from +8 in the fourth quarter of 2013.

But the index is expected to rise to +6 in the April-June quarter, the survey showed.

Loan officers cited the drop in capital spending and improvement of other funding tools as the main reasons for the drop in demand in the first quarter, according to the survey conducted from March 11 to April 10.

This very short news item, filed from Tokyo, was posted on the Internet site on Sunday evening---and it's another article I found embedded in yesterday's edition of the King Report.

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Four King World News Blogs

1. SentimenTrader: "Presenting the Massive Tech Bubble in One Astounding Chart"  2. Dr. Stephen Leeb: "Axis of Power" as Countries Move to Link Currencies to Gold"  3. Jeffrey Saut: "Massive Volcanic Eruptions Wreaking Havoc On The World"  4. Grant Williams: "Collapse of Western Ponzi Scheme to Send Gold Skyrocketing"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Barclays joins retreat from commodities as new rules bite

Barclays will quit most of its commodities trading businesses, joining a broader retreat by banks as profits tumble in the face of tougher regulation.

The British bank's exit means three of the top five banks in commodities have significantly reduced or shuttered their natural resource trading arms since last summer, with profits hit by regulatory demands for lenders to hold more capital to shield them against any problems.

Barclays said it would exit most of its base metals, energy and agricultural trading but will continue in precious metals, some oil and gas derivatives products and index products. The smaller business will be based on electronic execution, it said.

The fact that Barclays will continue to trade precious metals should come as no surprise to anyone, as all the big banks that are selling their commodities divisions are keeping their precious metal trading desks, as you can't rig prices on the Comex if don't control the trading activity---especially when their in collusion.  This Reuters story appeared on their website during the New York lunch hour yesterday---and I found it on the Internet site.

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That Was Quick! Coins Commemorate Crimea-Russia 'Reunification'

A Russian factory has produced 25 palm-sized silver coins bearing President Vladimir Putin's face to commemorate Crimea's "reunification" with Russia, state media reported on Tuesday.

“Crimea's reunification with Russia was a historic event which we decided to embody in a souvenir collection of coins made of 925 grade silver,” said Vladimir Vasyukhinsaid, the director of the factory in Yekaterinburg, Russia, according to ITAR-TASS.

Each coin weighs about 2.2 lbs. [1 kilogram] and features Putin's portrait on one side and a map of Crimea on the other. The makers had not decided how much to charge for each, the news agency reported.

This news item showed up on the Internet site early yesterday morning EDT---and it's the final offering of the day from Elliot Simon, for which I thank him.

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Sprott Money: Ask the Expert---Koos Jansen

This 21:08 minute audio interview with Koos was posted on their Internet site yesterday.  There's also a transcript coming, but it won't be posted until today sometime.  I haven't had the time to listen to this Q&A session as of yet, but will read the transcript later today.

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Goldman Sachs Upgrades Gold/Silver Stocks to Neutral; Barrick Upped to Buy

Goldman Sachs is becoming more constructive on gold and silver equities and as a results is raising their coverage view to Neutral.

Analyst Andrew Quail said, "After underperforming the SPX by 21% since September 2013, gold and silver equities now appear more fairly valued, offering an average 7% total upside. We raise our coverage view to Neutral as we believe (1) more responsible capital allocation, (2) successful cost cutting initiatives, (3) a refocus on maximizing free cash flow, and (4) sound strategic portfolio optimization should improve the positioning of our companies offsetting our below-consensus outlook for commodity prices (we forecast $1,200/oz for gold from 2015 onwards)."

The firm is upgrading Barrick Gold Corp. to Buy, while initiating coverage on five others.

Please excuse me for asking, but isn't this the same Wall Street investment firm that said that gold at $1,050 was a slam-dunk this year?  This gold-related new item showed up on the Internet site early yesterday morning EDT---and I thank Casey Research's own John Grandits for bringing it to my attention---and now to yours.

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Lawrence Williams: Anglo’s platinum policy – fact or fiction?

Almost 20 years ago, Anglo American sacrificed Johannesburg Consolidated Investment (JCI) on the altar of emerging black investment in South African mining and in so doing took over the then around 50% owned JCI’s best assets. Of these perhaps the most significant were the company’s platinum mines around Rustenburg and its Union and Amandelbult operations, leaving Anglo American Platinum as comfortably the world’s largest platinum miner. Now, according to reports circulating in South Africa and in London, it appears to be looking at disposing of its deep Rustenburg platinum mining operations which it sees as a problematic and vulnerable business.

As we noted in recent articles the recent takeover of union negotiating rights on the platinum mines by the fledgling, highly aggressive, AMCU, and the subsequent now 13 week-long strike which has closed the Rustenburg mining operations, appears, according to media reports, to have focused Anglo’s mind on how to rid itself of this troublesome part of its operations, which requires a significantly higher platinum price to make it decently profitable.

As Lawrie has pointed out recently in another article on platinum mining, he's more than aware of the fact that platinum and palladium prices are just as managed as the prices of gold and silver.  This news item was posted on the Internet site yesterday.

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Apr 22, 2014

Gasoline Prices Rise to 13-Month High in Lundberg Survey

The average price for regular gasoline at U.S. pumps jumped 8.5 cents in the past two weeks to a 13-month high of $3.6918 a gallon, according to Lundberg Survey Inc.

The survey covers the period ended April 18 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company.

Prices are the highest since March 22, 2013. The average is 15.55 cents higher than a year ago, Lundberg said. Gasoline has risen 39.74 cents a gallon since bottoming out in February and is up 43 cents this year.

“The most important factor right now in this rise is crude oil, which rose by a very similar amount to the street-price move,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview Sunday. “From here, we will probably see very little increase, if any, with the big caveat of course being crude. If crude prices climb even higher, then this may not be the peak.”

Today's first news item, which is courtesy of West Virginia reader Elliot Simon, was posted on the Internet site on Sunday afternoon EDT.

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Brown Economists: 'Secular Stagnation' May Strangle Economy

The U.S. economy may not mend its woes soon and instead may suffer a bout of "secular stagnation," Brown University economists Gauti Eggertsson and Neil Mehrotra maintain in a recent paper.

A deleveraging shock, a drop in population growth, or an increase in income inequality could shift people from borrowing to savings, the economists say. Essentially, there simply aren't enough promising real-world investments, forcing investors to put their money into stocks, junk bonds, etc. — and not investments that create demand for a product. This weak demand results in economic stagnation.

And with a short-term interest rates already at zero, the Fed will be "unable to generate a sufficient monetary stimulus," they assert. The outcome: a "permanent slump in output," Eggertsson and Mehrotra write.

"It's not a baseline scenario, but I think people should at least be starting to consider the possibility that this could go on for a while," Eggertsson told

This short article also showed up on the Internet site, but this one is from last Friday morning EDT---and it's also courtesy of Elliot Simon.

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Doug Noland: Automatic Stabilizer?

From Yellen: “If the public understands and expects policymakers to behave in this systematically stabilizing manner, it will tend to respond less to such developments. Monetary policy will thus have an ‘automatic stabilizer’ effect that operates through private-sector expectations.”

The traditional gold standard was so effective because it in fact provided an “automatic stabilizer.” If Credit was created in excess, an economy would suffer a loss of gold. The reduced gold reserve would dictate higher rates and a (stabilizing) contraction in lending. Bankers and politicians understood the mechanics of the system (and were committed to sustaining the monetary regime), so they would tighten their belts when excess first emerged. In this way, the gold standard for the most part provided a stabilizing and self-correcting system. These days, everyone knows the Fed will not respond to excess. Our central bank, however, will be predictably quick to print additional “money” at the first sign of a faltering Bubble, liquidity that will further reward financial speculation. Excess begets excess. Today’s system is the very opposite of “automatic stabilizer.”

This all could sound too theoretical. But with the Fed intending to conclude balance sheet leveraging later in the year, this theory might soon be tested.

For obvious reasons, Doug's Friday commentary had to wait until today.  It's always worth reading---and this one is no exception, as I read it over the weekend.

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Lawyers Sue Stock Market for Being Rigged

On March 30, Michael Lewis went on "60 Minutes" and said that the stock market is "rigged." This past Friday, some plaintiffs' lawyers filed a lawsuit against, um, the stock market. This raises many questions, of which the most pressing is, what took so long? The lawsuit is basically just a synopsis of Lewis's book, "Flash Boys," and, I mean, how long can that take? I feel like plaintiffs' lawyers by now must have algorithms to transform news articles into lawsuits, so what was the holdup here?

The other problem with the lawsuit is that it pretty much sues the stock market for being the stock market. So the defendants include pretty much every stock and options exchange, and also literally every brokerage, and literally every high-frequency trading firm. There's a long list of brokerages and HFT firm.

Every brokerage firm that transacted for clients since April 2009 is (supposedly!) a defendant in this lawsuit, including just for instance noisy HFT critics Themis Trading. And everyone who "operated alternative trading venues which provided venues for the anonymous placing of bids and offers" is (supposedly!) a defendant, including just for instance Michael Lewis's heroes at IEX.

This Bloomberg story showed up on their website late yesterday morning EDT---and it's the first offering of the day from Roy Stephens.

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Eight E.U. states in deflation as calls grow for Q.E. in Sweden

Sweden has become the first country in northern Europe to slide into serious deflation, prompting a blistering attack on the Riksbank’s monetary policies by the world’s leading deflation expert.

Swedish consumer prices fell 0.4pc in March from a year earlier, catching the authorities by surprise and leading to calls for immediate action to avert a Japanese-style trap.

Lars Svensson, the Riksbank’s former deputy governor, said the slide into deflation had been caused by a “very dramatic tightening of monetary policy” over the past four years. He called for rates to be slashed from 0.75pc to -0.25pc to drive down the krona, and advised the bank to prepare for quantitative easing on a “large scale”.

Prof Svensson said Sweden was at risk of a “liquidity trap” akin to the 1930s, with deflation causing debt burdens to ratchet up in real terms. Swedish household debt is 170pc of disposable income, among Europe’s highest.

This Ambrose Evans-Pritchard commentary showed up on the Internet site late Friday evening BST---and it's definitely worth reading.  It's the second offering in a row from Roy Stephens.

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Shell tells Putin gas project not derailed by Ukraine

Royal Dutch Shell’s new CEO Ben Van Beurden met with Russian President Vladimir Putin on Friday, signaling Ukraine tension has not affected investment in Russia, and that energy contracts won't be derailed by international politics.

Chief executive Van Beurden met with the president at his residence outside of Moscow and reaffirmed the company’s commitment to develop Russia’s only liquefied natural gas (LNG) plant with Gazprom.

"We also know that this is going to be a project that will need strong support to succeed. So one of my purposes of meeting with you, Mr. President, is to also secure support for the way forward on this project," Van Beurden said.

“Now is the time to expand this lucrative project, we will need strong support to make it a success,” the oil chief said.

This news item showed up on the Russia Today website on Friday afternoon Moscow time---and I thank South African reader B.V. for sending it our way.

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Deadly shootout in eastern Ukraine threatens Geneva deal

The deadly shootout near the eastern Ukrainian city Slaviansk during the early hours of Sunday has sparked a heated international war of words in the wake of a deal signed in Geneva aimed at averting a broader conflict in the region.

At around 2am (11pm GMT), four vehicles rolled up to a separatist checkpoint near Slaviansk where they opened fire, pro-Russian militants reported. Three people were killed and three more wounded, police in Ukraine’s capital Kiev confirmed.The exact details and who was responsible for the incident are still unclear.

The deaths were the first from armed clashes in eastern Ukraine since Russia, Ukraine, the European Union and the United States signed a truce agreement in Geneva on Thursday calling for all illegal armed groups to surrender their weapons and vacate public buildings in Ukraine.

Sunday’s shootout, however, triggered a war of words between Russia and Ukraine’s government, with each questioning the others commitment to the Geneva deal, which sought in part to bring an end to the worst crisis between the West and Russia since the end of the Cold War.

This news item showed up on the Internet site early yesterday morning sometime---and it's another contribution from Roy Stephens.

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Russia, U.S. Trade Blame as Ukraine Accord Nears Collapse

Russia and the U.S. traded blame for failing to rein in extremists in Ukraine, as a diplomatic accord reached last week all but collapsed.

U.S. Secretary of State John Kerry warned Russian Foreign Minister Sergei Lavrov today that “there will be consequences” if Russia fails to act “over the next pivotal days” to restrain pro-Russian militants in eastern Ukraine, spokeswoman Jen Psaki said in Washington. In Moscow, Lavrov called on the U.S. to hold Ukraine’s interim government accountable for curbing what Russia portrays as right-wing militias.

The agreement signed in Geneva by Ukraine, the European Union, the U.S. and Russia on April 17 calls for all illegal groups to give up their arms and return seized buildings. Pro-Russian forces held their ground in several eastern cities, as their leaders denied they were bound by the accord. The government in Kiev has said Russia is behind the unrest, exploiting the situation to prepare a potential invasion.

This Bloomberg story, co-filed from Moscow and Kiev, was posted on their Internet site early yesterday afternoon Denver time.

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Only Ukraine Can Make Peace Happen

If the Ukrainian government in Kiev thinks that the truce signed last week in Geneva will make pro-Russian rebels go away, it had better think again.

Developments before and since the Geneva agreement, signed on April 17, demonstrate that Ukraine is a genuinely divided nation, in which Russian interference is merely a catalyst of resentment. Observers from the Organization for Security and Cooperation in Europe, led by the pedantic German diplomat Klaus Zillikens, have reported that neither side is following the agreement. As of April 19, pro-Russian rebels were still holding on to buildings in Donetsk, Lugansk and surrounding small towns, and Ukrainian "self-defense" paramilitaries in Dnepropetrovsk and Kherson were refusing to give up weapons or "regularize."

This should come as no surprise, given that no one in Geneva fully represented the sides in the actual conflict. The interim government is uneasy about the paramilitaries left over from the Maidan revolution that brought it to power. Russia has never admitted it had enough influence over the rebels in the east to make them lay down their arms. To Zillikens the stickler for precision, Russian presence in eastern Ukraine is not even an established fact. "There are signs that foreign consultants worked in Ukrainian territory," he told Echo Moskvy radio. "We do not, however, have any clear proof of that."

This very short Bloomberg op-ed piece showed up on their website yesterday sometime, I believe.  But it's hard to tell, as there's no dateline.  I thank Roy Stephens for sharing it with us---and it's worth reading.

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Pepe Escobar: Ukraine and the grand chessboard

Ukraine is for all practical purposes broke. The Kremlin's consistent position for the past three months has been to encourage the European Union to find a solution to Ukraine's dire economic mess. Brussels did nothing. It was betting on regime change to the benefit of Germany's heavyweight puppet Vladimir Klitschko, aka Klitsch The Boxer.

Regime change did happen, but orchestrated by the Khaganate of Nulands - a neo-con cell of the State Department and its assistant secretary of state for European and Eurasian Affairs Victoria Nulands. And now the presidential option is between - what else - two US puppets, choco-billionaire Petro Poroshenko and "Saint Yulia" Timoshenko, Ukraine's former prime minister, ex-convict and prospective president. The EU is left to pick up the (unpayable) bill. Enter the International Monetary Fund - via a nasty, upcoming "structural adjustment" that will send Ukrainians to a hellhole even grimmer than the one they are already familiar with.

Once again, for all the hysteria propagated by the US Ministry of Truth and its franchises across the Western corporate media, the Kremlin does not need to "invade" anything. If Gazprom does not get paid all it needs to do is to shut down the Ukrainian stretch of Pipelineistan. Kiev will then have no option but to use part of the gas supply destined for some EU countries so Ukrainians won't run out of fuel to keep themselves and the country's industries alive. And the EU - whose "energy policy" overall is already a joke - will find itself with yet another self-inflicted problem.

This absolute must read commentary by Pepe was posted on the Asia Times Internet site last Thursday---and it's another contribution to today's column from reader B.V.

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BRICS aim to finish development bank preparations by July summit

The BRICS bloc of emerging economies will have all preparatory work done for setting up its development bank by the group's summit in July, South African Finance Minister Pravin Gordhan said on Thursday.

The bank Brazil, Russia, India, China and South Africa plan to support infrastructure projects has been slow in coming, with prolonged disagreements over its funding, management and headquarters.

The group, which has struggled to take coordinated action on most issues in the past year after the scaling back of U.S. stimulus prompted an exodus of capital from their markets, is hoping their leaders will officially launch the bank at their July meeting in Brazil.

"We've made very good progress on the new development bank and most of the formal documentation is ready," Gordhan told journalists after a meeting of the BRICS finance ministers in Washington.

This Reuters story, filed from Washington, is 11 days old but dovetails nicely with the Escobar commentary above---and it's also courtesy of reader B.V.

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Iran Gets an Unlikely Visitor, an American Plane, but No One Seems to Know Why

President Obama has warned that Iran is not open for business, even as the United States has loosened some of its punishing economic sanctions as part of an interim nuclear pact.

Yet on Tuesday morning, Iran had an unlikely visitor: a plane, owned by the Bank of Utah, a community bank in Ogden that has 13 branches throughout the state. Bearing a small American flag on its tail, the aircraft was parked in a highly visible section of Mehrabad Airport in Tehran.

But from there, the story surrounding the plane, and why it was in Iran — where all but a few United States and European business activities are prohibited — grows more mysterious.

While federal aviation records show the plane is held in a trust by the Bank of Utah, Brett King, one of its executives in Salt Lake City, said, “We have no idea why that plane was at that airport.”

This very interesting story showed up on The New York Times website last Friday---and is certainly worth your time, if you have it.  Once again my thanks go out to Roy Stephens for digging it up for us.

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U.S. says forfeiture over Iran assets in New York, elsewhere will be record terror-related deal

A federal judge has approved plans to sell a 36-story Manhattan office building and other properties owned by Iran nationwide in what will be the largest terrorism-related forfeiture ever, a prosecutor said Thursday.

U.S. Attorney Preet Bharara said Judge Katherine Forrest approved the deal between the U.S. government and 19 holders of more than $5 billion in terrorism-related judgments against the government of Iran, including claims brought by the estates of victims killed in the Sept. 11, 2001, terrorist attacks.

The deal calls for the Manhattan building and other forfeited assets to be sold by the U.S. Marshals Service, with the U.S. government receiving reimbursement for litigation expenses and any costs of the sales before the rest is distributed to victims of terrorist attacks. The agreement stems from a 2008 lawsuit by the government against the building's owners.

Bharara said the settlement is an important step toward "completing what will be the largest ever terrorism-related forfeiture and providing a substantial recovery for victims of terrorism."

Excuse me for bringing up an "Inconvenient Truth"---but most of the "hijackers" involved in 9/11 were from Saudi Arabia---that's if you believe the American government's fairy tale about what happened on that day.  This AP story was picked up by Fox News---and posted on their Internet site on Thursday sometime---and I thank senior editor Nick Giambruno for bringing it to our attention.

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China Court Impounds Japanese Ship in Unprecedented Seizure

A Shanghai court ordered the seizure of a Japanese ship owned by Mitsui OSK Lines Ltd. as compensation for the loss of two ships leased from a Chinese company before the two countries went to war in 1937.

The 226,434-ton Baosteel Emotion was impounded on April 19 at Majishan port in Zhejiang province as part of a legal dispute that began in 1964, the Shanghai Maritime Court and Mitsui OSK said in notices on their websites.

The holding of the ship reflects strained ties between China and Japan amid a territorial dispute over an island chain and visits by Japanese politicians to a Tokyo shrine honoring that country’s war dead. The move is the first time a Chinese court has ordered the seizure of Japanese assets connected to World War II, and could cast a pall over the countries’ trade, according to Shogo Suzuki, a senior lecturer at the University of Manchester in the U.K. who studies China-Japan relations.

Wow!  This is an ugly turn of events---and certainly turns up the tension level more than a notch.  This Bloomberg news item, filed from Beijing, was posted on their website in the wee hours of yesterday morning MDT---and it's definitely worth reading.  It's also courtesy of Roy Stephens.

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Japan’s Trade Deficit Widens as Export Growth Weakens

Japan’s weakest export growth in a year spurred a wider-than-forecast trade deficit in March, adding to challenges for Prime Minister Shinzo Abe in steering the economy through the aftermath of an April 1 sales-tax rise.

The 1.8 percent rise in the value of shipments overseas from a year earlier, reported today by the Ministry of Finance, compared with a 6.5 percent median estimate of 27 economists in a Bloomberg News survey. An 18.1 percent jump in imports helped widen the deficit to the biggest ever for the month.

Exports by volume fell the most since June last year, suggesting external demand may fail to provide much support for an economy set to contract this quarter. A spending spree ahead of the tax increase boosted imports, already swollen by a surge in energy costs due to the yen’s slide and nuclear shutdowns.

This Bloomberg news item, filed from Tokyo, was posted on their Internet site late on Sunday evening Mountain Daylight Time---and I found it in yesterday's edition of the King Report.

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Nine King World News Blogs/Audio Interviews

1. Victor Sperandeo [#1]: "Legend Who Predicted 1987 Crash Warns "This Will End Badly"  2. Egon von Greyerz: "A Bankrupt World---$26,000 Gold---and the Destruction of Wealth"  3. James Turk: "Gold Market Now Seeing Deepest Backwardation in 8 Months!"  4. Victor Sperandeo [#2]: "The Catastrophic End Game---and Skyrocketing Gold Prices"  5. Ronald-Peter Stoferle: "Two of the Most Remarkable Charts We've Seen This Year"  6. Robert Fitzwilson: "Shocking Events Rapidly Unfolding Around the World"  7. Richard Russell:  "The Dollar Will Crash in a Matter of Months"  8. The first audio interview is with Victor Sperandeo---and the second audio interview is with Dr. Philipa Malmgren

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Sprott's Thoughts: Why Rick Rule Says ‘Anti-gold Investors Will be Destroyed’

Gold has made its way down again, to around 1,300 per ounce this month. Rick Rule, Chairman of Sprott Global Resource Investments Ltd. says that a few years out, you will be happy you stuck with gold.

For context to today’s downturn, look back at the great bull market for gold in the 1970s’.

As Rick recently put it to King World News, “that is the kind of regret that no investor wants to live with for the rest of their lives.”

Rick believes the overall bull market will return and produce substantial returns to investors who own gold.

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China Spot Copper Premium Surges as Supply Cut: Chart of the Day

Copper fabricators in China, the biggest consumer, are paying the highest premium in 29 months to secure delivery of the metal that’s used in everything from electric wires to water pipes.

Chinese smelters are hoarding the metal in bonded warehouses in an attempt to drive up the local price against the rate in London and sell it abroad at a profit, according to SMM Information & Technology Co. At the same time, local traders have locked up as much as 1 million metric tons as collateral to get credit for other investments, Goldman Sachs Group Inc. said on March 18.

The CHART OF THE DAY tracks spot prices in Shanghai and the futures contract for immediate delivery on the Shanghai Futures Exchange. The lower panel shows the premium reached 585 yuan ($94) a ton on April 16, the highest level since November 2011.

“The premium has surged while stockpiles in the physical market are decreasing rapidly as Chinese smelters are selling their copper to bonded zones,” said Jiang Ning, a senior analyst with Shanghai-based SMM Information.

This Bloomberg piece, filed from Shanghai, was posted on their Internet site at noon in Denver on Sunday---and it's the final offering of the day from Elliot Simon.

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The New York Sun: Piketty's Gold?

In terms of public policy, though, we favor honest money. It works out better for more people. And there is a moral dimension to the question of honest money. This was a matter that was understood — and keenly felt — by the Founders of America, who almost to a man (Benjamin Franklin, a printer of paper notes, was a holdout), cringed with humiliation at the thought of fiat paper money. They’d tried it in the revolution, and it had been the one embarrassment of the struggle. They eventually gave us a Constitution that they hoped would bar us from ever making the same mistake.

There is an irony here for Monsieur Piketty. It was France who gave us Jacques Rueff, the economist who had the clearest comprehension of the importance of sound money based on gold specie. He was, among other things, an adviser of Charles de Gaulle. It was de Gaulle who in 1965, called a thousand newspapermen together and spoke of the importance of gold as the central element of an international monetary system that would put large and small, rich and poor nations on the same plane. We ran the complete text of Professor Piketty’s book “Capital” through the Sun’s own “Electrically-operated Savvy Sifter” and were unable to find, even once, the name of Rueff.

Reflecting on French economist Thomas Piketty's new book, "Capital," The New York Sun offers a most politically incorrect explanation for the explosion in income inequality and unemployment in the United States since the 1970s: the end of the dollar's gold convertibility and the unleashing of the age of infinite fiat money.  I found this N.Y. Sun editorial embedded in a GATA release yesterday---and it's worth reading.

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Barrick Proposal to Acquire Newmont Hits Roadblock, Sources Say

Talks between Barrick Gold Corp and Newmont Mining Corp about a potential merger have hit a snag, but sources close to the situation say the companies remain keen to reach a deal and discussions are likely to resume.

The talks had been on for a few weeks, and the two sides had broadly agreed to a transaction under which Toronto-based Barrick would acquire Denver-based Newmont in an all-stock deal, said one source close to the matter.

That source said the deal would offer Newmont shareholders a slight premium to its current share price. Newmont shares rose 6.4 percent to close at $25.05 on the New York Stock Exchange, while Barrick's shares edged down 78 cents Canadian to C$19.03.

The sources, who asked not to be named due to the sensitive nature of the situation, said the talks have stalled over the issue of the spin-out of some assets from the combined entity, which is among the hurdles to a deal.

This gold-related story showed up in a Reuters piece filed from Toronto very early yesterday evening---and another item I found over at the Internet site yesterday.

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Press’ anti-gold scare tactics largely ineffective

The first lesson to file for future reference is that major banks with huge balance sheets and big-name consultants do not necessarily have a better crystal ball on the gold price than anyone else. The second is that, when it comes to gold reporting, one should not accept as gospel everything one sees or reads in the mainstream media. Its traditional anti-gold bias bleeds from its pages, so to speak, and should be taken with a grain of salt.

The mainstream media, for whatever reason, continues to believe that it can scare potential gold owners away with its consistently negative coverage, but as a recent Gallup Poll suggests, such tactics no longer work all that well. That poll ranks gold the second best option among long-term investments behind real estate and tied with stocks.

What makes gold’s poll performance interesting is that it reflects public opinion on gold after a more than two year decline that began in 2011 and at a time when real estate and stocks have enjoyed strong performances. In 2011, after ten straight years of annual gains, the public ranked gold the number one investment. Prior to 2011 gold was not included in the Gallup survey.

This commentary by Mike Kosares, was posted on the Internet site on Sunday---and it's certainly worth skimming.

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Sprott cites GATA consultant on Chinese demand, notes paper bombing of gold

Interviewed by Sprott Money News, Sprott Asset Management CEO Eric Sprott cites gold researcher and GATA consultant Koos Jansen and GoldMoney's Alasdair Macleod in support of his belief that the World Gold Council's estimates of China's gold demand are grossly understated. Sprott also discusses last week's manipulation of the gold market via the dumping of a huge amount of paper gold.

The interview, which was posted on the Internet site last Thursday, runs for 10:28 minutes.

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CORRECTION: Platinum producers increase wage offer, negotiations resume

Editor's note: A previous version of this article titled "Platinum producers capitulate on union pay demand" updated by Mineweb's Kip Keen incorrectly stated Impala Platinum and Anglo American had met Association of Mineworkers and Construction Union (AMCU) demands. Mineweb apologises for any confusion it created.

While the platinum producers new offer is significant and guarantees more years of higher wage increases, it does not fully meet AMCU demands.

The AMCU has asked for an increase in basic pay to R12,500 over a 4-year period for entry-level workers.

Impala and Anglo American are now offering R12,150 in cash remuneration - which includes basic pay but also a living allowance and holiday pay - over a five year period for entry-level workers. The new offer would be reached by 2017 and, as previous offers, would be back dated to mid 2013.

It's obviously back to the drawing board for negotiations between the platinum producers and their workers in South Africa.  This correction to the's Thursday story was posted on their website shortly after the original news item showed up there.

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China stands tough on rare earths trade war; appeals WTO ruling

China’s Ministry of Commerce (MOFCOM) announced Thursday that it will appeal a World Trade Organization ruling that China’s restrictions on rare earths, molybdenum and tungsten exports violate global trade rules.

In response to a reporter’s question during a press briefing Thursday, Ministry of Commerce spokesman Shen Danyang told reporters China would present its cross appeal to the WTO Thursday.

No matter what the outcome of the appeal, Shen said, China will continue to protect resources and environmental policy objectives will not change. China will continue to comply with the WTO rules on strengthening the management of resources products and maintaining fair competition, he stressed.

This news item showed up on the Internet site last Friday.

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China allows gold imports via Beijing, sources say, amid reserves buying talk

China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves.

The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong's pole position in China's gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of gold to the mainland.

"We have already started shipping material in directly to Beijing," said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

This very interesting Reuters story, filed from Singapore yesterday, is definitely a must readZero Hedge also had something to say about this story as well.  It's headlined "China Goes Dark: PBOC to Keep Goldbugs Clueless About Its Gold Buying Spree"---and is courtesy of reader Bill Crampton.

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Apr 18, 2014

NYT: Rents No Longer "Affordable" for Most Americans

Demand for rental housing has soared over the past seven years, and that has pushed rents higher than many middle-class Americans can afford to pay.

A rule of thumb is that households shouldn't pay more than 30% of their income on rent and utilities.

But now half of U.S. renters devote more than 30% of their income to housing, up from 38% in 2000, revealed a report from Harvard University.

Housing Secretary Shaun Donovan has called this "the worst rental affordability crisis that this country has ever known."

The story from The New York Times showed up on the Internet site early Wednesday afternoon EDT---and today's first news item is courtesy of West Virginia reader Elliot Simon.

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IHS Economist: "Living Standards Will Suffer" as Food Prices Surge

Food prices are registering sharp gains, climbing 0.4% in both February and March and threatening to put a damper on the economy.

What's happening is that wholesalers have raised the prices they charge grocers, and grocers in turn have passed along the increases to their customers, USA Today reports. That obviously creates a hardship for consumers, who account for about 70% of GDP.

"Living standards will suffer, as a larger percentage of household budgets are spent on grocery store bills, leaving less for discretionary spending," Chris Christopher, an economist at IHS Global Insight, told USA Today.

The bad news may not be over. California's drought will probably push prices upward this year for fruits and vegetables, including avocados, lettuce and berries, Timothy Richards, a professor at Arizona State University's business school, told the paper.

This short article from USA Today on Thursday, was also picked up by the Internet site---and it's also courtesy of Elliot Simon.

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Hedge Funds Post Worst First-Quarter Results Since 2008

It’s time again for another installment of “Hedge Funds Are a Ripoff,” our long-running series chronicling the asset class’s habit of underperforming far less exotic investments while charging more and limiting clients’ access to their own money.

Hedge funds posted their worst first-quarter results since 2008, according to financial data service Preqin, whose “All Hedge Fund Strategies” index shows a gain of 1.2% since the start of the year. That compares with a 1.8% total return for the Standard & Poor’s 500-stock index through March 31. Hedge funds have badly trailed plain-vanilla equities over the past 12 months, gaining 8.53% vs. 19.32% for the S&P. In 2013, the gap between hedge funds and stocks was the widest since 2005.

Defenders of hedge funds often get exasperated when the asset class gets compared with stocks: The investments are not supposed to outperform equities when the market is on a tear, this argument goes—they operate complicated strategies that hedge against lots of contingencies, so that they do well in all types of weather. Well, nobody would call 2014 a bull market, and hedge funds aren’t exactly shining now, either.

This piece appeared on the Internet site on Wednesday---and I found it in yesterday's edition of the King Report.

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Matt Taibbi: The SuperRich in America Have Become "Untouchables" Who Don't Go to Prison

Earlier this month, attorney James Kidney, who was retiring from the Securities and Exchange Commission, gave a widely reported speech at his retirement party. He said that his bosses were too "tentative and fearful" to hold Wall Street accountable for the 2008 economic meltdown. Kidney, who joined the SEC in 1986, had tried and failed to bring charges against more executives in the agency’s 2010 case against Goldman Sachs. He said the SEC has become "an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. ... Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening," he said.

Well, for more, we turn to our guest Matt Taibbi, award-winning journalist formerly with Rolling Stone magazine, now with First Look Media. His new book is called The Divide: American Injustice in the Age of the Wealth Gap.

Matt, we welcome you back to Democracy Now! It’s a remarkable, important, certainly needed book in this day and age. Talk about the thesis. What is the divide?

This interview/book review was posted on the website on Tuesday---and for content and length reasons, had to wait for today's column.  It's the first offering of the day from Roy Stephens.  This will be on my must-read pile for the weekend.

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After Success on Iran, US Treasury's Sanctions Team Faces New Challenges

This is what the modern American war room looks like: the clocks on the wall show the times in Kabul, Tehran and Bogota. The faces around the conference table are mostly young. There is talk of targets, and of middle-of-the-night calls to Europe.

But the meeting one recent morning convened deep within the Treasury Department, not the Pentagon. The weapons at hand were not drones or cruise missiles, but financial sanctions, aimed with similar precision at U.S. rivals' economic interests.

Before discussing possible next steps against Russia over its annexation of Crimea, Adam Szubin, the slim, boyish-looking director of Treasury's Office of Foreign Assets Control, thanked his team for putting in a string of sleepless nights to devise sanctions against senior Russian officials and associates of President Vladimir Putin.

The measures, rolled out in three executive orders signed by President Barack Obama in March, included blocking the Russians and Bank Rossiya, Russia's 17th-largest bank, from access to the U.S. financial system and freezing their U.S. assets.

This longish Reuters story, filed from Washington, was posted on their website late Monday afternoon EDT---and it's another news item that had to wait for today's column.  It's definitely worth reading---and Ambrose Evans-Pritchard touches on it in the story from The Telegraph posted below this one.  I thank senior editor Nick Giambruno for bringing it to our attention.

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US Financial Showdown with Russia Is More Dangerous Than It Looks, for Both Sides

The United States has constructed a financial neutron bomb. For the past 12 years an elite cell at the US Treasury has been sharpening the tools of economic warfare, designing ways to bring almost any country to its knees without firing a shot

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century.

"It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies' financial lifeblood, unprecedented in its reach and effectiveness," says Juan Zarate, the Treasury and White House official who helped spearhead policy after 9/11.

“The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive,” he writes in his book Treasury's War: the Unleashing of a New Era of Financial Warfare.

This absolute must read Ambrose Evans-Pritchard commentary showed up on the Internet site very early Wednesday evening BST---and I found it in yesterday's edition of the King Report.

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Runaway Spy Snowden Is Surprise Guest on Putin Phone-In

Edward Snowden, the fugitive former U.S. spy agency contractor who leaked details of U.S. intelligence eavesdropping, made a surprise appearance on a TV phone-in hosted by Vladimir Putin on Thursday, asking the Russian president if his country also tapped the communications of millions.

The exchange was the first known direct contact between Putin and Snowden since Russia gave the American refuge last summer after he disclosed widespread monitoring of telephone and internet data by the United States and fled the country.

Snowden was not in the studio with Putin, who angered U.S. President Barack Obama by refusing to send the American home to face espionage charges. He submitted his question in a video clip that a lawyer said had been pre-recorded.

Snowden, 30, wearing a jacket and open-collar shirt and speaking before a dark background, asked Putin: "Does Russia intercept, store or analyze, in any way, the communications of millions of individuals?"

This must-read Reuters story, filed from Moscow, was posted on their Web site late on Thursday morning EDT---and it's the second contribution to today's column from Roy Stephens.

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Putin Says it's Impossible for Europe to Stop Buying Russian Gas

Russian President Vladimir Putin said on Thursday it would not be possible for Europe, which is trying to cut its reliance on Russian energy, to completely stop buying Russian gas.

Putin also said that the transit via Ukraine is the most dangerous element in Europe's gas supply system, and that he was hopeful a deal could be reached with Ukraine on gas supplies.

Russia meets around 30% of Europe's natural gas needs. Moscow's actions in Ukraine have spurred attempts by the continent to reduce its dependency on oil and gas supplies from the former Cold War foe.

"Of course, everyone is taking care about supply diversification. There, in Europe, they talk about increasing independence from the Russian supplier," said Putin.

This is another story that's courtesy of Elliot Simon.  It was posted on their Internet site later in the morning EDT.

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Opinion: Putin's Q&A Session Was Brilliant, Sincere, Warm, and Compassionate

The President of the Russian Federation Vladimir Putin conducted his yearly question-and-answer session with the public and citizens of Russia, this time spending approximately three hours and fifty minutes answering a wide range of questions in an impressive manner never once faltering or at a loss and citing facts, figures and details on everything from assisting a disabled man to obtain a home to the aggressive expansion of NATO to the East. This year the Kremlin added a the possibility of sending in video for those who wanted to ask the president questions, as well as text messages, e-mails, regular post, phone calls and submissions through the Internet.

This very interesting commentary, which is worth reading, showed up on the Internet site early on Thursday evening Moscow time---and it's the final offering of the day from Roy Stephens, for which I thank him.

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Saudi Spy Chief Ousted Under US Pressure: Experts

The exit of Saudi's spy chief was the result of US pressure over his stance on Syria but does not signal a shift in Riyadh's goal of toppling the Damascus regime, experts say.

Riyadh, as is usual, did not elaborate on its statement this week that Prince Bandar bin Sultan was being replaced, saying only that the veteran diplomat had asked to step down.

But a Saudi expert said that Washington -- irritated for some time by Prince Bandar's handling of the Syria dossier -- had in December demanded his removal.

This news item showed up on the Internet site later in the afternoon Europe time---and it's certainly a must read for all students of the New Great Game.

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Death from Above: How American Drone Strikes Are Devastating Yemen

The people of Yemen can hear destruction before it arrives. In cities, towns and villages across this country, which hangs off the southern end of the Arabian Peninsula, the air buzzes with the sound of American drones flying overhead. The sound is a constant and terrible reminder: a robot plane, acting on secret intelligence, may calculate that the man across from you at the coffee shop, or the acquaintance with whom you've shared a passing word on the street, is an Al Qaeda operative. This intelligence may be accurate or it may not, but it doesn't matter. If you are in the wrong place at the wrong time, the chaotic buzzing above sharpens into the death-herald of an incoming missile.

Such quite literal existential uncertainty is coming at a deep psychological cost for the Yemeni people. For Americans, this military campaign is an abstraction. The drone strikes don't require U.S. troops on the ground, and thus are easy to keep out of sight and out of mind. Over half of Yemen's 24.8 million citizens – militants and civilians alike – are impacted every day. A war is happening, and one of the unforeseen casualties is the Yemeni mind.

Symptoms of post-traumatic stress disorder, trauma and anxiety are becoming rampant in the different corners of the country where drones are active. "Drones hover over an area for hours, sometimes days and weeks," said Rooj Alwazir, a Yemeni-American anti-drone activist and co-founder of Support Yemen, a media collective raising awareness about issues afflicting the country. Yemenis widely describe suffering from constant sleeplessness, anxiety, short-tempers, an inability to concentrate and, unsurprisingly, paranoia.

Ah, yes!  America bringing "democracy" to all countries of the world.  This two-page essay showed up on the Rolling Stone Web site on Monday---and is another news item that had to wait for today's column.  It's also another offering from Roy Stephens.

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America's Coup Machine: Destroying Democracy Since 1953

Soon after the 2004 U.S. coup to depose President Jean-Bertrand Aristide of Haiti, I heard Aristide's lawyer Ira Kurzban speaking in Miami.  He began his talk with a riddle: "Why has there never been a coup in Washington D.C.?"  The answer: "Because there is no U.S. Embassy in Washington D.C."  This introduction was greeted with wild applause by a mostly Haitian-American audience who understood it only too well.

Ukraine's former security chief, Aleksandr Yakimenko, has reported that the coup-plotters who overthrew the elected government in Ukraine "basically lived in the (U.S.) Embassy.  They were there every day."  We also know from a leaked Russian intercept that they were in close contact with Ambassador Pyatt and the senior U.S. official in charge of the coup, former Dick Cheney aide Victoria Nuland, officially the U.S. Assistant Secretary of State for European and Eurasian Affairs.  And we can assume that many of their days in the Embassy were spent in strategy and training sessions with their individual CIA case officers.

To place the coup in Ukraine in historical context, this is at least the 80th time the United States has organized a coup or a failed coup in a foreign country since 1953.  That was when President Eisenhower discovered in Iran that the CIA could overthrow elected governments who refused to sacrifice the future of their people to Western commercial and geopolitical interests.  Most U.S. coups have led to severe repression, disappearances, extrajudicial executions, torture, corruption, extreme poverty and inequality, and prolonged setbacks for the democratic aspirations of people in the countries affected.  The plutocratic and ultra-conservative nature of the forces the U.S. has brought to power in Ukraine make it unlikely to be an exception.

If I had to pick just one story for you to ready today---this would be it.  And if you want to hear about these sorts of things from the inside, John Perkins, author of Confessions of an Economic Hit Man, was an operative for the U.S. in some of these situations.  This longish essay showed up on the Web site on April 8---and it's another contribution from Roy Stephens, for which I thank him.

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Japan Population Drops for Third Year Straight; 25% Are Elderly

Japan’s population has shrunk for the third year running, with the elderly making up a quarter of the total for the first time, government data showed Tuesday.

The number of people in the world’s third-largest economy dropped by 0.17% or 217,000 people, to 127,298,000 as of last Oct. 1, the data said. This figure includes long-staying foreigners.

The number of people aged 65 or over rose by 1.1 million to 31.9 million, accounting for 25.1% of the population, it said.

With its low birthrate and long life expectancy, Japan is rapidly graying and already has one of the world’s highest proportions of elderly people.

This very interesting story is definitely worth reading.  It was posted on the Internet site on Tuesday sometime---and it's another story I found in yesterday's edition of the King Report.

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Japan Bond Market Liquidity Dries Up as BoJ Holding Crosses ¥200 Trillion

The Bank of Japan’s massive purchases of government debt hit a milestone this week, sucking liquidity out of the market to such an extent that the benchmark 10-year bond went untraded for more than a day, the first time in 13 years.

Data from the BoJ late on Monday showed its holding of Japanese government bonds topped ¥200tn ($1.96tn), or about 20% of outstanding issuance – up by more than half from ¥125tn about a year ago.

The fall in market liquidity looks set to intensify as the BoJ has vowed to continue its aggressive buying for at least another year, with market players expecting it to expand its easing some time later this year.

“Everybody thinks the market is not going to move for the time being because of the purchase by our dear customer, the BoJ,” said a trader at a major Japanese brokerage.

This Reuters story from Tuesday found a home over at the Internet site---and I thank reader 'David in California' for sending it around yesterday.

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Five King World News Blogs

1. David P: "One of the Greatest Opportunities In More Than a Decade"  2. Art Cashin: "Unprecedented $5 Trillion Liquidity Monster to Be Unleashed"  3. Keith Barron: "The Elites Fear What Will Crash the Global Financial System"  4. Richard Russell: "Silver---and the Greatest Mistake My Father Made"  5. "Pippa" Malmgren: "Western Default, China---and Gold"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Paper Gold Falls in West, but Premium for Real Metal Jumps in India

Hawala Premium Crosses 4% as Akshay Tritiya Boosts Demand; Spot Delivery Premium also Doubles

The premium for getting spot delivery for gold in the Indian market jumped to $70 an ounce from $35 a couple of days earlier, with a sudden scarcity.

While the trade is facing a scarcity of gold in official channels due to lower imports by private banks, the increase in demand in the unofficial market resulted in the hawala market premium crossing four per cent from 2.75-3% a few days earlier and 2-2.25% a month before, said a source in the Kolkata market, where smuggled gold inflow is said to be higher.

Recently, gold spot premiums were on a downward trajectory due to permission to five private banks to import gold. However as the new financial year had begun, a private bank bullion desk official said quarterly and yearly targets were being fixed, which is why their import was limited.

This gold-related news item, filed from Mumbai, showed up on the Business Standard Web site late on Wednesday evening IST---and I found it embedded in a GATA release.

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Asia Takes Every Ounce West Unloads, but Gold Will Fall for Two Years, GFMS Says

A lack of investment interest in gold is starting to take its toll on the price, with an average of $1,225/oz forecast for 2014 and heading lower in 2015, GFMS said Thursday in its Gold Survey 2014.

The price forecast is 13% lower than the 2013 average of $1,411.23/oz.

"The price is expected to post 2014 lows in mid-year, with a fundamentally driven rally thereafter, but this is likely to peter out in early 2015," the Thomson Reuters/GFMS survey read.

Despite the "heavy visible sales from Exchange Traded Funds, driving a 25% price fall in the second quarter [of 2013], OTC investors were net buyers in 2013, notably in East Asia and the Middle East," the report read.

This story showed up on the Internet site midmorning in London yesterday---and it's another gold-related news item I found in a GATA release.  By the way, I'd take anything that GMFS says with a big grains of salt.  But it's worth reading nonetheless.

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Platinum Shortfall to Take Four Years to Fix - Morgan Stanley

A labor dispute that all but shut platinum mines in South Africa since January is extending the longest shortfall in global production since 2005, which Morgan Stanley predicts will take at least four years to fix.

For a third straight year, makers of auto parts and jewelry will use more of the metal than is mined. Credit Suisse Group AG on March 31 raised its deficit forecast for this year by 25% to 836,000 ounces, after concluding the strike in South Africa, the world’s top producer, will prevent more than 1 million ounces from being retrieved in 2014.

Workers who normally earn 5,000 rand ($474) a month have gotten nothing since the walkout began, forcing some to sell belongings as union leaders renew demands for higher pay. Mine owners including Lonmin Plc say they are losing $15 million a day and may buy metal to meet supply commitments. Hedge funds more than doubled their bets on higher prices this year, and holdings in exchange-traded funds backed by platinum are up 68% from a year ago.

This longish Bloomberg story, co-filed from Johannesburg and New York, was picked up by the Internet site yesterday---and represents the final offering of the day from Elliot Simon.  It's certainly worth reading.

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Platinum Producers Capitulate on Union Pay Demand

Saying they could "ill afford" it, Anglo American Platinum and Impala Platinum made a startling offer to the Association of Mineworkers and Construction Union (AMCU) on Thursday in a bid to end a 13-week long strike that has shut down much of South Africa's platinum sector.

Both Anglo American and Impala issued press releases stating they would agree to pay entry-level underground workers a minimum of R12,500 a month in pay by July 2017.

The offer appears to substantially meet the AMCU's strike demand on pay that Anglo American, Impala and Lonmin had long maintained was impossible.

I linked this story further up when I was discussing the strange timing of the selloffs in both platinum and palladium in New York trading yesterday, but here it is again if you missed it.  It was filed from Johannesburg---and posted on the Internet site yesterday sometime---and it's worth reading as well.

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